The squabble between Apple and the music industry over how much iTunes downloads should cost is one that's been going on for some time. Last year, at a press conference in Paris (and later in an interview I did with him), Steve Jobs said the result of variable pricing would be more piracy. "If they want to raise prices, it's because they're greedy. If the price goes up, people turn back to piracy - and everybody loses."

The AP's thesis -- "any moves to abandon uniform pricing will test whether music fans are willing to pay more to download music that many only a few years ago acquired for free" -- tracks Jobs' contention that variable pricing only encourages piracy. Analysts give Apple's market share the edge in this debate.

Variable pricing is a big issue, and labels are lobbying hard to change the iTunes model. They say it will let them sell music at a lower price. Of course, the converse is also true: selling in-demand music at a higher premium is really what the industry is after. Flogging off cheaper niche tracks is just a fringe benefit.

Last year a thought-provoking piece by Joel Spolsky also referred to this issue. In it, Spolsky said that variable pricing shouldn't be adopted because it implies that the cheaper product is worse.

Pricing sends a signal. People have come to believe that "you get what you pay for." If you lowered the price of a movie, people would immediately infer from the low price that it's a crappy movie and they wouldn't go see it. If you had different prices for movies, the $4 movies would have a lot less customers than they get anyway.

I think he's wrong in many ways. Most cinemas do charge different prices for movies; usually dependent on the time, or the nature of the show (for example I went to a two-for-one double bill last weekend of His Girl Friday and Some Like It Hot at the Curzon - both genuine classics, but I saw both for £6.50.)

Similarly, if I walk into a high street music shop, I don't expect to see every CD on sale for £9.99 (in fact, I'm bombarded with variable prices). But Spolsky's argument does raise an interesting point, because ultimately variable prices rely on supply and demand. It doesn't take an economics professor to realise that popular tracks would increase in price and unpopular ones would decrease.

But because we're not dealing in physical formats, why should higher demand mean higher cost? After all, there's no scarcity of stock for popular music sold on iTunes: in theory, it can be downloaded by an infinite number of people (indeed, this week's top-selling single was download-only). Similarly, selling less popular downloads for a lower price is about making a sale full stop, not about selling existing stock.

We shouldn't naively expect that variable pricing would keep prices at the same mean price - but would such a change be worth it for you?